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This week's gainers and losers |
Gainers: Chip maker Advanced Micro Devices benefited from good quarterly results, especially compared to those of Intel, which disappointed investors a few days earlier. +17.1%
Electronic Arts did not convince the market. The outlook is gloomy due to the delay of the release of the new Star Wars game. -10%
US firm ConocoPhillips, like other players in the oil sector such as Marathon Petroleum, has suffered from a big shift of investors to risk assets. At the same time, the decline in oil prices is not helping. -10% |
Commodities |
Energy: It's party time for risky assets, well not for all of them since oil is losing ground this week for the second week in a row. The sharp increase in weekly inventories in the United States has clearly weighed on oil prices, thus taking a backseat to OPEC's instructions to its members, which still advocates caution and lower production due to continuing uncertainties around global demand for crude. Another highlight is that the European Union will implement a ban on Russian refined products such as diesel this weekend. Northern European Brent and US WTI prices are losing ground at USD 82.50 and USD 76 per barrel respectively. For natural gas in Europe, the Rotterdam TTF remains under pressure at around 58 EUR/MWh. Metals: Overall, base metal prices remained stable this week on the London Metal Exchange, where a ton of copper is trading around USD 9,100. Supply issues are still the focus for investors, particularly in Peru where protests are causing disruption. The ounce of gold peaked at USD 1956, but is still poised to end the week down nearly 1%. The World Gold Council said that demand for gold is at an all-time high in 2022, thanks in large part to central banks' appetite for the barbaric relic. Central banks have accumulated more than 1,100 tons of gold, double the level in 2021. Agricultural products: Grain prices were little changed this week in Chicago, where bushels of wheat and corn traded at 757 and 670 cents, respectively. |
Macroeconomics |
Atmosphere. Fight the Fed. The monetary policy decisions announced this week by the Fed, ECB and BoE did not deviate from expectations in terms of rate hikes. On the other hand, the conferences that followed had some surprises. Especially on the side of the US central bank. Investors feared that Jerome Powell would chastise them for their excessive optimism. Nothing of the sort happened. The central banker appeared confused and his calls for caution were a flop. His posture even reinforced the bulls' favorite scenario of the moment: the Fed is very close to its rate peak and the economy will hold up until it is time to resume a downward cycle. The only "shadow" in the picture is the very dynamic US employment figures for January, published on Friday, which raise fears of a return to firmness by the Fed. We are going in circles. Currencies. The euro regained ground this week against the major currencies, due to the position of the European Central Bank. The institution raised rates by a quarter point, as expected, keeping a firm speech, where the Fed and the Bank of England seemed more measured. The euro is trading at USD 1.0870 and CHF 0.9979. The British pound, on the other hand, lost ground as the BoE governor suggested that much of the work has been done in the current monetary tightening cycle. Elsewhere, the yen advanced against the U.S. dollar to JPY 129.60 per USD. Rates. Last Wednesday's announcement of a 25 basis point hike by the Fed was interpreted by investors as a dovish sign that the US 10-year yield would suffer. However, the employment report impacted sentiment. It largely exceeded expectations and simply cancelled out the drop recorded a few days earlier. In the end, the 10-year oscillated in a narrow channel of +/-3.35% and 3.56%. An upward breach of this range would validate a more significant rebound to 3.90/95%, which would certainly weigh on equity indices. The German 10-year yield is also yo-yoing between 2.32% and 1.97%, without really managing to show a clear trend in the short term. Cryptocurrencies. Bitcoin remains at equilibrium around $23,000 this week, after recording its best January since 2013. A performance that can be explained by a clear revival of investor appetite for risky assets in the beginning of 2023. If the macroeconomic environment continues to brighten and U.S. monetary policy softens in the coming months, the conditions will be right for the cryptocurrency market to continue its ascent. But it is still far too early to draw any certainty on this subject. Timeline. In addition to another fresh batch of corporate results, investors have a few important appointments next week. Starting with a speech by Jerome Powell on Tuesday. Will the Fed Chairman look to refine his Wednesday remarks? It's a mystery. In Europe, the EU will release its new economic forecasts on Thursday. Eyes will turn back to the US on Friday with the release of the preliminary consumer confidence index from the University of Michigan. An important marker to determine if the economy is decelerating slowly or violently. |
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Things to read this week | ||||||
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*The weekly movements of indexes and stocks displayed on the dashboard are related to the period ranging from the open on Monday to the sending time of this newsletter on Friday. The weekly movements of commodities, precious metals and currencies displayed on the dashboard are related to a 7-day rolling period from Friday to Friday, until the sending time of this newsletter. These assets continue to quote on weekends. |